On Om's blog, Robert Young argues that traditional media companies should follow News Corp’s acquisition of MySpace and focus on building “socially-integrated media empires.” If they listen, Michael and Barry will indeed look like visionaries.
But just as the Internet was not a subset of AOL, social media will not become a subset of traditional media. In fact, social media will increasingly begin to compete directly with traditional media consumption. Yes, it is true that the media output produced and distributed by the audience itself will generally be of lower production value and quality. Even so, they will prove highly competitive to Hollywood products, as the personal engagement factor inherent in personal media outweighs any loss of production value.My emphasis, not his. Damn, that's a powerful statement. Read it again:
The personal engagement factor inherent in personal media outweighs any loss of production value.If you are in the content, media or advertising business, think about what that means for your business.
Scott Karp counters that the model assumes that media companies can “own” social media in the old media sense, and in fact they cannot:
As I’ve argued before, the reason why News Corp is struggling to monetize MySpace is that most people who visit MySpace are not visiting “MySpace,” the News Corp media property — they are visiting EACH OTHER.I'm not sure. With homepage revenue at a reported $1M/day, I'd say they're not really struggling to monetize the site, as Scott suggests. One thing is clear - MySpace, Bebo and co. do not have the model completely figured out, and at this stage I don't find that surprising at all.
One interesting suggestion Scott makes concerns the development of an AdSense-type system for MySpace and/or other social networks.
It would seem the real opportunity is for someone, News Corp or a third party, to offer MySpace users a platform like AdSense to monetize their content. In this scenario, MySpace is merely a free host, like Blogger — it gives them no advantage in providing this distributed ad platform.
Technorati Tags: social.netowrks, advertising
Wednesday, July 12, 2006